Recent Trends in Human Resource Management

Thursday, February 21, 2008



Recently, a leading MNC in the country decided to lay off more than 500 of their employees from different verticals on grounds of poor performance. The organisation believed that they had given these 500 and more employees a chance to redeem themselves but all efforts seemed to have gone in vain as they showed little or no signs of improvement and were hence asked to put in their papers, voluntarily. Though, in the past, this practice was exercised by organisations occasionally, only in times of dire crisis; in today’s corporate scenario, there are quite a few number of organisations laying off people especially in bulk. There are such times in every organisation when they need to make a decision as to who has to be retained and who has to be let off, especially during situations like mergers and acquisitions, bankruptcy, poor performance, crisis etc. But today, there are ways through which organisations can help their employees under such circumstances by showing a little empathy, concern and a whole lot of counselling.


Though not an easy time in an organisation, such situations are known to arise when the employees least expect. Shiv Agarwal, CEO, ABC Consultants says that such situations can be planned or unplanned and the organisation has to be ready to face the grind. "The most common reason for an unplanned reactive move is a severe economic crisis – if the company faces a sudden financial slump, either in the country it is operating in or elsewhere. In the case of a planned layoff, the employees should be given adequate warning so that they can make alternate provisions. Their economic interest must also be looked after," he explains.

Once in the face of the situation, there is not much one can do to change anything. However, organisations have to be prepared in their own way and be ready with a plan of action to handle the situation. Experts say that having a plan of sorts can help them to break the news to the employees. "Before letting any of the employees off, no matter how large the employee base, the news has to be communicated to the 'laid off employees' and the reason too of doing so. Every employee needs to be told that they are being let off because the situation has called for it," expresses Sampat Shetty, VP, TeamLease Services Pvt. Ltd.

Vishal Khanna, Head, Management Development, Ceat Ltd. further explains, "There needs to be a strategically appointed committee involving people from all the affected functions for communicating such matters as HR alone may not be the only equipped function to break the news."


Experts say that while letting off people, it is the HR department that plays a very crucial role. It is at this time when they can help the heads of the department to evaluate and figure out who has to be let off and who can be retained. Agarwal explains, "The HR department should address the situation in a dignified and controlled manner. There are companies giving a few hours notice for its employees to pack up and leave. It is a very sensitive matter and therefore the process becomes tough and painful. There have been cases where the HR has handled the whole situation very badly and it has only showed lack of maturity and insensitiveness on the part of the company. At times like these, it is necessary that HR should announce layoffs in advance, giving their stockholders, employees and other participants advance notice."

Khanna says that HR's main role is to is to carefully and sensitively manage the decision making process, the communication process and the culture before, during and after the retrenchment as there is going to be a great sense of job insecurity and how the process is handled will define the future of the organisation and its employer brand in the market."


Laying off people is not an easy task, however in the end it has to be done. But experts today also emphasise that there are various ways through which they can help the employees in getting things back in order. "Companies usually say that bulk layoffs are done because the employees were not performing. This is done to avoid legal hassles etc. However, they could be a little more upfront and call it a kind of an ‘austerity measure' rather than putting the blame on the employees. Further, companies can hire counsellors to address the grievances of ‘to-be laid off’ employees and advise them on the prospects of employment. Professional consultants who address them are expected to take a positive stand. They collect the CVs and assure them of jobs elsewhere in the industry," explains Agarwal. Shetty adds that organisations can help these 'laid off' employees by giving them a second chance within the organisation. He explains, "These employees should be the first choice of employment in case an opening within the organisation opens up.” Another alternative that Khanna suggests is that some of these employees can be re-skilled or be put up in different roles and can be hired as per the work requirement. "The organisation can also provide them with positive service certificates and reference certificates to facilitate their employment search," he adds.

Agarwal further adds, "Companies should provide career counselling. Further, the job market leans heavily on referrals."

In the end, when employees have to be laid off, there is nothing much one can do about it. However, the organisation can help in their own way and keep in mind that when the time comes to hire someone new, they will think of their exemployees first.

Reference: Ramiya Bhas (TOI)

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